Survey says: Homeowners want to refinance — and it could save them $44,000 or more.
In August, refinance activity was up by 458 percent
Mortgage rates have dropped nearly a full point in the last year, and as a result, refinancing has surged in popularity.
In August, refinances accounted for a whopping 43% of all closed loans. That’s up from 29% only a year ago.
And those are just the homeowners who pulled the trigger.
According to a survey of The Mortgage Reports readers, the number of homeowners considering a refinance last month was up 458 percent compared to a year earlier.
Rates did rise last week, leaving August’s near-record lows behind. But they’re still far below historic averages. If refinancing has been on your mind, now might be the time to lock your new rate.
Who’s refinancing in 2019?
It’s no wonder refinancing is in this season. Data from Black Knight shows that more than 9 million homeowners could shave up to 0.75% off their interest rate by refinancing. That equates to more than $260 per month and nearly $8,000 over the course of a 30-year loan.
The average loan balance for borrowers refinancing has jumped $16,500 since August 2018. This could indicate that homeowners are looking to refinance earlier in their loan terms. Considering interest rates have dropped almost a full point in just one year, there are big incentives to doing so.
In fact, Black Knight’s recent Mortgage Monitor report shows that 80% of all mortgages originated in 2018 have an interest rate at least 0.75% higher than current averages. Pre-2004 mortgages could also see big savings.
The Bottom Line
Refinancing essentially resets your mortgage loan, and while that can be a scary thought, the fact is it’s the smartest financial move for many homeowners — especially if you’re paying a much higher interest rate than you need to.
Given historic rates, today’s current rate, and experts’ predictions for the rest of 2019, it’s safe to say that refinancing by the end of the year could equate to at least some financial savings (if not significant ones) for a large share of homeowners.
Are you curious how much you could save on your mortgage loan? Then shop around and see what rates you could qualify for today.